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The strategic planning process is a bit like charting a course across the ocean before leaving port. Though you’ll surely encounter surprises once you embark, your strategy map will help you get back on track and keep your eyes on your destination no matter what the journey throws your way. What is Strategic Planning?In the words of Dwight Eisenhower:
Strong leaders understand that while things rarely go according to plan in the real world, the act of planning enhances our goal-setting, solidifies our mission and vision, and gives us a competitive advantage by clarifying what truly matters most. Strategic planning is a process in which leaders map out their vision for an organization and establish the steps that will ensure that this vision becomes a reality. Strategic planning helps leaders communicate goals to the rest of the team, and make sure that everyone understands their role in achieving them. What’s the Difference Between a Strategic Plan and a Business Plan?A business plan is generally created when a business is launched or dramatically changes how they operate. A startup will typically need to make a business plan before approaching a bank for funding. A business plan includes basic information like:
A strategic plan is typically created after the business is launched. It includes detailed strategic information about the business environment, including:
In short, your business plan will contain foundational information about how you operate, and your strategic plan will be an in-depth roadmap demonstrating your primary operational plans and how senior leadership plans to execute them. Why is Strategic Planning Important?There are several benefits of strategic planning: Establish DirectionStrategic planning assists you in goal setting and helps you develop a business strategy against which all your other decisions can be checked. Move from Reactive to ProactiveHaving a strategic plan allows you to proactively take steps toward your objectives and adapt to industry trends rather than reacting to catastrophes and making shortsighted decisions. Improve Operational EfficiencyWhen your organization understands its priorities and the initiatives that will support them, you can set aside budgetary resources accordingly. Enhance ResiliencyCompanies that keep their strategic goals front of mind are more likely to bounce back and return to their roadmap after a setback. Increase ProfitabilityYour strategic plan should be monitored, and actions checked against a variety of metrics to ensure that sales and marketing efforts are aligned with your organizational goals and enhance your market share. What are the 5 Steps to the Strategic Planning Process?Ideally, your strategic plan will be created by a small group of five to ten key stakeholders. This group is generally referred to as your management committee. Though you will involve other team members in the process, your management committee will be responsible for the primary decision-making along the way. Step 1 – Define your Strategic PositionIn order to decide where you want to go, you need to fully understand where you are. Some key elements you’ll want to focus on here include:
Step 2 – Confirm your Goals and ObjectivesDetermining your strategic goals will set the stage for the remaining steps of the strategic planning process. You’ll want to return to your business plan and re-acquaint yourself with the destination you initially set for the business. Revisit the following:
Step 3 – Create a PlanWith the information you’ve gleaned from steps one and two, you can now begin creating your plan document. This is the phase where your senior leadership, represented by your management committee, has the opportunity to share how you plan to achieve your goals. In this strategy formulation stage, consider:
Step 4 – Begin ImplementationWhen putting your plan into action, the key to success is communication. Does everyone understand the organization’s mission and strategic framework? Do they know what role they will individually play in achieving your long-term goals? From there, establish your KPIs for each phase, and ensure that everyone in the organization understands the metrics on which their performance will be measured. Step 5 – Review and ReviseEffective strategic planning involves frequent monitoring and revising. Share your plan document with the organization and check back in with relevant teams to understand the progress you’ve made. Remember: This is a living document that can be altered and improved. Use your strategic plan to inform your short-term decision-making, and continue to tweak the plan as new insights arise. Final ThoughtsSuccessful strategic planning has ripple effects that take hold throughout the organization. In determining and implementing the methodology required to meet your goals, adopting a business model that streamlines their achievement, and employing strategic thinking to meet or exceed the KPI targets, you’re ensuring that everyone in your organization is aligned with a singular vision. If your company is looking for support in creating your strategic plan, consider working with a tool that can help. Check out our list of the best strategic planning software platforms on the market today. For more information on effective strategic planning, don’t miss these articles from our subject matter experts:
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